Transcription
So, my husband and I plan to do FIRE by the age of 50. If you've never heard of it before, FIRE means financial independence retire early. Right now, we are actually on track to retire 15 years earlier than the usual age of retirement in Canada, which is 65.
And the way we make sure that we are on track towards our retirement goal is to actually do a finance check-in every single year, and we do this around January. The first step is to know your FIRE number. Your FIRE number will depend on the lifestyle that you want to have by the time you actually want to retire. So, for us, that is about 3 million by the age of 50. If you want to know what your FIRE number is, there are so many different FIRE calculators out there. I recommend you going to one and filling out the details that you want, so you know exactly what your FIRE number goal is.
Step two in finance check-in is to know where you're at in terms of your finance. So, for this step, we actually just look at the number that we have saved up from the last year. So, we look at whether we are short or we have a surplus of money, which means that we are going to get to our retirement goal earlier.
Step three is to set yearly saving goals. So, after figuring out where we're at, we make a plan to have a new savings goal for the upcoming year, depending on the FIRE number that we are trying to achieve. Looking at our FIRE number, we know that we need to save up at least $18,000 a year to reach our FIRE goal. So, this means that we have to allocate $18,000 of saving every single year if we want to reach our FIRE goal.
Step number four, which is the most important thing, is to automate these saving goals. Because we know that we need $18,000 every single year to achieve our FIRE goal, that means we have to allocate and automate this amount of money every single month. This is about $1,500 every single month for both me and my husband. That means this money is automatically transferred from our checking into the retirement fund.
This is the simple way that we do our finance check-in every single year. If you found this content helpful, make sure to follow for more.